ECON 202 1st Edition Lecture 17Outline of Last Lecture I. How unemployment is measured and how the unemployment rate is calculatedII. Three types of unemployment III. The factors that determine the natural rate of unemploymentIV. The economic costs of inflationV. How inflation and deflation create winners and losersOutline of Current Lecture I. Human CapitalII. Technology and productivityCurrent LectureI. Human capital: the improvement in labor created by the education and knowledge embodied in the workforce.Technological progress: an advance in the technical means of the production of goods and services.Aggregate production function:a hypothetical function that shows how productivity (real GDP per worker) depends on the quantities of physical capital per worker and human capital per worker as well as the state of technology.Diminishing returns to physical capital:holding the amount of human capital per worker and the state of technology fixed, each successive increase in the amount of physical capital per worker leads to a smaller increase in productivity.II. Technology and Productivitya. So additional amounts of physical capital are less productive when the amount of human capital per worker and the technology are held fixed. i. But this assumes all other things equal.Diminishing returns may disappear if we increase the amount of human capital per worker orimprove the technology or both as the amount of physical capital per worker is increased.These notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.Convergence hypothesis: international differences in real GDP per capita tend to narrow over
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